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HLL seeking partners for mushrooms, shoe businesses

Fast moving consumer goods major Hindustan Lever is looking for partners for its mushrooms and leather shoe manufacturing businesses.

"We are in the process of identifying potential partners for these businesses and pending this, we propose to transfer these businesses to one or more subsidiary," a company spokesman said.

HLL had acquired processing and sale of mushrooms and manufacture and sale of shoes, shoe uppers and leather goods, consequent to amalgamation of Pond's India Ltd with the company.

These undertakings were catering mainly to the export market with mushrooms processing unit at Ooty and leather manufacturing units at Mettupalayam, and Vazudavoor Road in Pondicherry and Tindivanam and Pallavaram in Tamil Nadu.

The combined turnover of these two units, which employed about 1,000 workers, during the previous accounting year was close to Rs 1 billion. Their net book value of the fixed asset aggregated to about Rs 200 million and working capital employed was to the extent of another Rs 200 million.

He said the proposed move will enable them to induct suitable parties who might add value to these businesses through technological knowhow, international marketing and design capability as joint venture partners or as prospective acquirers of these businesses, as appropriate, depending upon commercial merits.

"The proposed transfer to a subsidiary could provide a structure which would enable us to achieve the above objectives," he said.

HLL, however, made it clear that the two units would be initially transferred to only existing subsidiaries and there was no proposal to set up any new subsidiary for acquisition.

The company will move a resolution seeking permission of its shareholders to transfer the mushroom and shoes businesses to existing subsidiary in its coming annual general meeting on June 22.

"It is only an enabling resolution and will be implemented at the time of inducting a joint venture partner," the spokesman said.

Incidentally, HLL, as part of its future growth plans had decided to retain only 30 national 'power brands'. "Through aligning our resources behind these power brands, we will strengthen their equities further. We will leverage these strong equities to bring to the market big, bold innovations that are consumer relevant," the company had said.

HLL had recently decided to transfer Quest division, acquired from Ponds, under a joint venture with ICI India. A resolution seeking permission of shareholders in this respect would also be moved at the AGM, the spokesman added.

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